# What is breakage in loyalty?

Breakage is value you gave out that nobody ever used: stamps that never reach a reward, vouchers that expire unused. It looks like money saved and mostly is not, because a lot of breakage usually means people gave up on your programme.

Source: https://fidella.app/glossary/breakage
Last reviewed: 2026-08-30

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Breakage is one of the few loyalty terms that means something specific in
accounting as well as in marketing, and the two readings pull in opposite
directions.

## The finance reading

Value issued and never claimed reduces the eventual cost of the programme. If
you have recognised a liability for outstanding rewards, an estimate of breakage
is how you size what will never be claimed.

## The marketing reading

Nobody redeems because nobody got there. A programme with very high breakage is
usually one where the threshold was too high, the expiry too short, or the
reward not worth chasing. You have collected the margin and lost the behaviour
change you were paying for.

## What to do with it

Treat it as a diagnostic rather than a revenue line. If breakage is climbing,
look at your threshold before you celebrate.